There is a common saying for traders: "buy the rumour, sell the news". I have over 2 million units in AVZ and I'm sitting on quite substantial paper losses. I was tempted to sell on the news this morning, and buy back in a pip or two lower. Three things were on my mind:
1. The technical down trend is still in effect, its is getting close to being broken however IMO.
2. Impatient investors (or traders) might have been looking for an exit and this great news about such positive drill results was a perhaps a good opportunity to exit with minimal losses, or maybe a pip up for the traders.
3. While it looks like the bulls will have the day in the long run, for now the bears are still in control. You see it every day on close, most of the sell depth just disappears but the buy depth remains solid after the market closes. The market depth gave my spider senses that feeling that today this would go south.
FA will win the day for AVZ in the long run. However, this is not a get rich instantly stock. Fortune will favour those have the patience and presence of mind to ignore the attempts of the bears to frustrate you out of your shares.
Ultimately, I decided to put the last $15K of my capital on the line and bought more at 13c. I got burned with this stock in February last year I sold over a million units hoping to buy back in a few pips lower only to see the damn thing skyrocket as soon as my order got filled.
AVZ Price at posting:
12.8¢ Sentiment: Buy Disclosure: Held
